Close
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Artificial Intelligence
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Networking

    Sun to Cut up to 5,000 Jobs

    By
    Chris Preimesberger
    -
    May 31, 2006
    Share
    Facebook
    Twitter
    Linkedin

      Sun Microsystems is cutting up to 13 percent of its workforce as part of a growth plan designed to return the struggling tech giant back to profitability.

      About 4,000 to 5,000 of Suns global workforce of about 37,500 will lose their jobs as part of a plan announced May 31 by the Santa Clara, Calif., company.

      The job cuts will occur over the next six months, according to Sun, which also said it is selling its Newark, Calif., campus and facilities it leases out in Sunnyvale, Calif.

      Sun officials expect the moves to save the company between $480 million and $590 million annually, with the savings being realized starting in the fiscal fourth quarter in 2007.

      They expect to take restructuring charges of $340 million to $500 million over the next several quarters.

      The moves come as Sun undergoes a number of changes, most importantly Jonathan Schwartz taking over as CEO for Scott McNealy, who held the post for 22 years.

      Schwartz said his first task is to undertake a complete review of the companys operations and make moves designed to bring the company back to financial health.

      Industry observers for years have called for Sun to pare back its workforce to more closely match its business climate, and said they hoped Schwartz would make the difficult decisions that McNealy declined to do.

      However, one analyst said that while job cuts were needed, the number may give people pause.

      “The sheer size of the number of layoffs may blow a big hole in the fantasy some might have heard [about Suns financial health],” said Charles King, an analyst with Pund-IT Research, in Hayward, Calif. “You dont ax 4,000 to 5,000 people unless youve got some serious problems.”

      With a new CEO in place, some reorganization is to be expected, King said.

      Sun now has to make sure that it doesnt cut too deeply in its engineering ranks, which could hurt the companys efforts to remake itself.

      Next Page: Moving in the right direction.

      Moving in the Right


      Direction”>

      In a press conference announcing the moves, Schwartz said he was confident that Sun was moving in the right direction.

      “Our enterprise business has slowed but the rate of deceleration has leveled off,” he said.

      “Our software business is doing reasonably well [and] the leading indicators are good for all our divisions. We think that the [IT] market is going to continue to grow, and we want to get our fair share of it.”

      This is the second round of jobs cuts in the past two months. In April, Sun announced a 7 percent cut—about 200 people—in its Scalable Systems Group, which at the time was responsible for the SPARC server line.

      Sun has since merged its two server businesses, which also includes its “Galaxy” servers powered by Advanced Micro Devices Opteron processors.

      The Galaxy servers are part of a push Sun has undertaken over the past couple of years to remake itself after falling from the top ranks of the tech industry during the Internet bubble.

      Along with embracing the x86 space, Sun also has aggressively courted the open-source community, releasing to it such technology as Solaris and its multicore UltraSPARC T1 processor.

      /zimages/4/28571.gifTo read more about Suns efforts to court the open-source community, click here.

      Sun also is making a push into the storage space, headed by its $4.1 billion acquisition of Denver-based Storage Technology in June 2005.

      Before the acquisition, Sun had no major-league storage products to complement its server business.

      By being able to bundle servers and storage as a complete package, much like IBM and Hewlett-Packard have done for years, Sun looked to put itself on a more level playing field when bidding for business against those companies.

      Sun has been able to bring some big-time customers, such as Disney and several Public Broadcasting stations, into its customer base by selling them products such as StorEdge 6920 array and its Content Infrastructure System. Schwartz said storage will continue to be a key focus for Sun.

      “Well be doubling down on areas like Solaris and StorageTek, where we have reason to believe that we can have inexpensive growth,” he said. “The R&Ds all done there, and the markets for those are ramping up.”

      King, the Pund-IT analyst, said it was not surprising to see job cuts come during such a time of change.

      “When a company is in a state of transition like this, it needs to do two things,” he said.

      “One is, you need to keep the faithful happy and satisfied. … At the same time, you need to get ready to make tough decisions.”

      /zimages/4/28571.gifCheck out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.

      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.
      Get the Free Newsletter!
      Subscribe to Daily Tech Insider for top news, trends & analysis
      This email address is invalid.

      MOST POPULAR ARTICLES

      Latest News

      Zeus Kerravala on Networking: Multicloud, 5G, and...

      James Maguire - December 16, 2022 0
      I spoke with Zeus Kerravala, industry analyst at ZK Research, about the rapid changes in enterprise networking, as tech advances and digital transformation prompt...
      Read more
      Applications

      Datadog President Amit Agarwal on Trends in...

      James Maguire - November 11, 2022 0
      I spoke with Amit Agarwal, President of Datadog, about infrastructure observability, from current trends to key challenges to the future of this rapidly growing...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Applications

      Kyndryl’s Nicolas Sekkaki on Handling AI and...

      James Maguire - November 9, 2022 0
      I spoke with Nicolas Sekkaki, Group Practice Leader for Applications, Data and AI at Kyndryl, about how companies can boost both their AI and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×